I'm processing the quarter end information for a small convenience store and they have purchased a motor home in the quarter.
The have given me a finance sheet with no vat and also another invoice with VAT, which was a little confusing. I have been on the HMRC website and it appears that motorhomes sometimes have VAT and othertimes not.
The client called the office yesterday and reuqested that we claim the VAT, which is around £5,000. I'm still learning so asked a few colleages and they said that as long as it was definately for business, then the VAT was reclaimable if it's on the receipt.
The business is a partnership between a husband and wife and the client has said that the motorhome will be used 75% for business, does this mean that they can only cliam this proportion of VAT too. Sorry it's all new to me and it's nice not to keep asking questions to the others in the office sometimes.
The question has to initially be, is it definitely a motor home?
To be classified as a motorhome then it must meet ALL of the following criteria :
a permanently installed sink and cooking facilities
seating arrangements so that diners can sit at the meal table
at least one bed which has a minimum length of 1.82 metres
a permanently installed fresh water tank with a minimum capacity of ten litres
If it passes the above tests and if purchased legitimately for business purposes then my understanding is that one treats the purchase as per a van rather than a car so VAT would be recalimable on the purchase.
If it fails any of the above tests then it's a car and the VAT is not reclaimable.
The motorhome is an asset of the business and the VAT should be reclaimed in it's entirety rather than on a proportional basis.
The benefit in kind on the Motorhome would be the same as the benefit in kind on a van. (Current flat rate would be £3550, £3000 for use of the vehicle and £550 for fuel).
Such is only my understanding. I've not had a client brave enough to venture this question with me so I hope that others with more practical experience of a similar situation can confirm my understanding.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
